Medicare-Medicaid experiment aims to save on care

Dec. 5, 2012
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by Mary Agnes Carey and Sarah Varney, Kaiser Health News

by Mary Agnes Carey and Sarah Varney, Kaiser Health News

PICO RIVERA, Calif. â?? It is usually after the mail arrives that Della Saavedra comes undone.

That's when she sits in her living room in this Los Angeles suburb and sorts through the latest round of letters from her health plan, each rejecting her appeal to stay with her trusted oncologist at City of Hope, a cancer center.

For as long as she can remember, Saavedra, 53, a former cafeteria worker who suffers from bone marrow cancer, has been insured through Medicaid, the joint federal-state program for low-income people. For most of that time, she could go to any doctor willing to take her, but last year, the state revamped the program and assigned her to a managed care plan with a restricted network of doctors. Her oncologist is not on its roster.

"I have been sick for years and no problem," Saavedra says. Then it became "a huge problem."

Saavedra is one of a large group of disabled Medicaid enrollees in California who have been moved out of traditional fee-for-service health coverage into a managed care plan. The goal is to determine whether these patients, who have complex medical needs, receive better medical care while saving the government money.

The California experiment, in its second year, has national significance. Federal officials have begun to roll out a similar but larger effort required by the new health care law, the Affordable Care Act. That program will move up to 2 million of the nation's sickest and most expensive patients into managed care.

Twenty-five states have applied to be part of the managed care experiment for these "dual-eligibles," people who qualify for both Medicaid and Medicare, the federal health program for seniors and people with disabilities. A typical dual-eligible is poor, over 65 and suffering from chronic illnesses such as diabetes and heart disease. Massachusetts and Washington, the first states to be approved, will start their programs April 1.

Patient advocates around the country warn that managed care plans â?? some run by for-profit, publicly traded companies â?? are ill-equipped to deal with the health needs of the elderly, mentally ill or disabled. Advocates are looking closely at the experiences of patients such as Saavedra in California to see what the pitfalls of the national program may be.

"We have to think about the fact that people's lives are at stake," says Kevin Prindiville, an attorney with the National Senior Citizens Law Center.

Federal and state governments spend nearly $300 billion each year on the medical and home care needs of patients who are enrolled in both Medicaid and Medicare. They account for 31% of Medicare's spending and 39% of Medicaid's spending, according to the Centers for Medicare and Medicaid Services.

"Medicare-Medicaid enrollees include some of the most chronically ill and complex enrollees in both programs," says Melanie Bella, who oversees the experiment as director of the Medicare-Medicaid Coordination Office.

The goal is to improve the care of these fragile patients by coordinating it better. The system could save money by eliminating needless tests and office visits and too many hospitalizations.

Those are sound principles, but the size of the experiment worries many.

"(It's) too much, too fast, too soon," says attorney Vanessa Cajina, who has represented several patients in the California Medicaid managed care experiment in her work with the Western Center on Law and Poverty in Sacramento. A recurring theme, Cajina says, is that the health plans did not have the range of specialists in their networks to care for people with complex or rare medical conditions.

Emma Sandoe, a spokeswoman for the Centers for Medicare and Medicaid Services, says the upcoming national experiment will have a safety hatch for patients: They will be able to opt out of managed care if they wish.

Experts say opting out is likely to be a daunting bureaucratic hurdle for many of these patients. "Fifty percent of duals either have cognitive impairments or serious mental illness. How's that going to work?" says Robert Berenson, a former vice chairman of the Medicare Payment Advisory Board.

One major concern about the experiment involves patients who depend on home health and personal care aides to live safely at home. Community service providers say insurance companies that will run the program have little experience overseeing the long-term, home care needs of frail, isolated patients. Many insurers "wouldn't have had in-home supportive services," says Steven Wallace, chair of the Department of Community Health Sciences at the UCLA Fielding School of Public Health. This includes patients who need support every week, not just the week they are discharged from the hospital, he says.

Health plan administrators say they will be ready to meet the needs of their newest members. "Plans are going to be covering services that they haven't done before," says Lisa Kodmur, program manager for seniors and people with disabilities at L.A. Care Health Plan. "It doesn't mean we can't. It just means we haven't done it."

Indeed, L.A. Care has begun to tailor its services by dispatching visiting nurses and medical assistants to members' homes to check blood sugar levels and blood pressure. It also promotes a 24-hour nurse hotline.

Steven Sample, 63, who lives in a group home in Glendale, Calif., and suffers from a debilitating nervous condition and diabetes, says he loves the attention L.A. Care provides. "My heart was beating really fast the other day, and I called and the nurse said to lay down," he says. "I would have gone to the emergency room if I didn't have the advice line."

And cancer patient Saavedra received some good news in the mail last month: Her health plan, L.A. Care, has given her permission to go out of its network of cancer specialists and get treatment from her longtime doctor.

Kaiser Health News is an editorially independent program of the Henry J. Kaiser Family Foundation, a non-profit, non-partisan health policy research and communication organization not affiliated with Kaiser Permanente.